Organizational Analysis of Starbucks

Kanika Samra

Yawen Xu &

Organizational Analysis of Starbucks

Yawen Xu & Kanika Samra
Rutgers University

Organizational Analysis of Starbucks

Kanika Samra

Yawen Xu &

Organizational Analysis of Starbucks

History and background
Starbucks had modest beginnings as a local coffee shop in Seattle, which sold
coffee, tea and spices. Their shared love for coffee and tea brought together Gordon
Bowker, Jerry Baldwin and Zev Siegl who started Starbucks in 1971. The growth of the
company was slow until 1981 when they owned a roasting plant and four retail stores,
which sold whole bean coffee in Seattle. However, in 1982 Howard Schultz, the current
CEO, joined Starbucks. Though his initial tenure as a marketing executive for the
company was short, he returned in 1987 to buy the company and merged it with his chain
called Il Giornale. Thus, in 1987 Starbucks Coffee Company was born with a base of 17
stores. In the following years the growth of the company was exponential and by 1991
Starbucks owned 100 retail stores. The company went public in 1992.
Starbucks stores grew tenfold within five years after the initial public offering. By
2013, the once small roaster claimed over $16.4 billion in annual revenues and more than
19,767 locations in 64 countries around the world. (Annual report of Starbucks, 2013)

Starbucks Communication Style

Voice and Conduit Metaphors
On analyzing material available on the Starbucks website, we came to the
conclusion that two metaphors were highly prominent and pertinent to this organization.
The voice metaphor talks about the expression and suppression of organizational
members views. It includes processes of engagement as well as marginalization of

Organizational Analysis of Starbucks

Kanika Samra

Yawen Xu &

individuals within an organization (Putnam and Boys, 2006). In the case of Starbucks the
voice metaphor operates as a means of engaging and creating dialogue. Secondly, it also
presents itself as a means of empowerment; creating channels for the expression of
individual employees views. Starbucks lists on its websites brochures, which provide
information about ethical decision-making, conflict of interest and gifting patrons and
government employees. There are also mechanisms for grievance redressal that are listed
on the website. Employees are encouraged to contact their immediate supervisors in case
of problems and if need be they are encouraged to bypass such authority. Thus, on
examination of company manuals and brochures for employees we came to the
conclusion that voice metaphor manifests in its positive avatar.
The second metaphor that is apparent is the conduit metaphor. An organization
employing the conduit metaphor is categorized as a mechanistic organization with high
formalization, high centralization, narrow spans of control, and high standardization
(Anthony, Gales & Hodge, 2003). In order to allow a free flow of information from
customer and low-tier employee to the corporate level these organizations work to create
efficient and streamlined structures to avoid the breakdown of communication. They
divide their labors into cross-functional work teams, so their employees can report to
multiple supervisors. Starbucks displays division of labor similar to the matrix structure.
This structural behavior has allowed the corporation to have successful communication
upward, downward and laterally with its employees (Successful Application of
Organizational Behavior: Starbucks, 2009). The matrix structure of the organization is
beneficial for promoting internal and external communication by allowing the existence

Organizational Analysis of Starbucks

Kanika Samra

Yawen Xu &

of voices from multiple stakeholders. In the case of Starbucks this is achieved by

providing channels

that encourage open communication between employees,

management, and executives. Moreover employees at all levels are called Partners,
emphasizing the importance given to employees at all levels of the organization.
Externally, Starbucks works on building their communication tools to facilitate customer
feedback. For instance, Starbucks has an online community which incorporates
Facebook, YouTube, Twitter, Pinterest, Google+, and a My Starbucks Idea website.
These platforms provide an open forum for ideas and discussions about products and
services (Gray, 2009). Starbucks communication structure assists communication
upward, downward and across between employees, and outward to customers as well. Its
communication methods guarantee an open communicative environment, allowing their
stakeholders to have a voice.
Theories of Organizational Communication
The theories of organizational communication are drawn largely from theories of
management. As mentioned above Starbucks communication seems to operate within the
metaphors of conduit and voice. In keeping with the conduit metaphor, the channels of
communication are bureaucratic. Webers bureaucratic system has the following
features: hierarchical system of authority, division of labour according to
specialization, a complete system of rules regarding rights,
responsibilities and duties of personnel, exhaustive procedures for
work performance and impersonality in human organizational
relationships. There are set procedures on Starbucks website which

Organizational Analysis of Starbucks

Kanika Samra

Yawen Xu &

guide and inform their partners about their rights and duties and
repeatedly stresses on the empowerment of employees. But all this
can be and must be done following rules and procedures.
One feature that separates and perhaps enriches this
bureaucratic set up is the emphasis on the power that each partner
has, this aspect is reminiscent of Mary Parker Follets
Administrative Theory. Follet gave a communication bias to her
theory by stating that participation, requires conference as its
method in joint committees of workers and managers who meet to
get from each other the special knowledge and experience each has.
Follet through her work realized that power-with not power-over is the
real test of any plan of employee representation. The emphasis in
Starbucks company literature on the power of each partner is then
perhaps an example of pluralistic responsibility based on function, not
hierarchy, which is one of the key pillars of Follets theory for
organizational effectiveness.
A third element that is exhibited in the Starbucks structure is the
interconnectedness of subsystems. The system theory of organization
has three key features: wholeness, hierarchy and openness. This
theory stresses that the whole is greater than the sum of its parts.
Starbucks mission statement, to inspire and nurture the human spirit
one person, one cup and one neighborhood at a time; signals

Organizational Analysis of Starbucks

Kanika Samra

Yawen Xu &

towards just such a philosophy which is bolstered by the numerous

social responsibility and community initiatives that the company
undertakes. Such initiatives allow its partners to contribute in their
communities as productive members. Hierarchy has already been
illustrated in the discussion on conduit metaphor. Finally, open systems
are in constant interaction with their environment. Papa, Daniels and
Spiker

(2008) list feedback as a feature of open systems, which is

further divided into two processes of maintenance and adaptation.

Maintenance according to Papa et al is a regulatory process while
adaptive processes are responsible for bringing about growth and
change. Both of these depend on feedback responses to the system, which
could be negative or positive. These responses then become the basis for creating new
conditions for the organization, thus creating new system conditions. Papa et al cite an
example that explains that feedback can be both formal and informal. The Starbucks
manuals for employees similarly provide the partners with a variety of options to report
problems and provide feedback. This extends to customers and other stakeholders who
are similarly informed and invited to converse on the online communities created by
Starbucks. Therefore, on the surface Starbucks organizational communication is open to
feedback and in constant interaction with its environment.

Organizational Analysis of Starbucks

Kanika Samra

Yawen Xu &

References:
Papa, Michael J., Daniels, T. D., & Spiker, B. K. (2008). Organizational Communication:
Perspectives and Trends. (5th Ed.). Thousand Oaks, CA: Sage.
(ISBN: 978-1-4129-1684-4)
Putnam, L. L., & Boys, S. (2006). revisiting metaphors of organizational
communication.Handbook of Organization Studies, 541-576.
(2009). Successful Application of Organizational Behavior: Starbucks. Retrieved from the
Associated Content Website on September 8, 2010:
http://www.associatedcontent.com/article/1355959/successful_application_of_organizatio
nal.html?cat=3
Starbucks Recipe For Social Media Success. (n.d.). Retrieved from
http://www.dirjournal.com/articles/starbucks-social-media/

Organizational Analysis of Starbucks

Kanika Samra

Yawen Xu &